Heat News

Thursday 12 November 2009

Industry representatives in the heat sector claim supply is going to be an issue in meeting 2020 targets

Industry representatives yesterday (November 11 2009) called for the government to ensure the proposed Renewable Heat Incentive (RHI) is strong enough to support the "aggressive growth rate" needed in the heat sector.

Speaking on the second day of the Renewable Futures Power for Growth event - organised by Regen SW - in Bath, representatives from the heat sector claimed the RHI would need to offer a similar rate of return to that offered by the Renewables' Obligation in the power sector in order to meet "ambitious" government renewables targets.

The Department of Energy and Climate Change (DECC) will launch a consultation on the RHI in December 2009 with the scheme due to be implemented from 2011. According to the Renewable Energy Strategy, its aim is to drive "a massive increase in renewable heat from current levels below 1% up to around 12% by 2020" - equating to around 72TWh.

Commenting on the RHI, Richard Bridle from RES/Wood Energy, said: "The policy does not lack ambition. The target is there and it is clear and it is a huge scale up for the industry, but we have to make sure the RHI is strong enough to make that target happen.

"At the moment most funding for projects is grant based. The RHI must be at the same level, if not better, to replace the amount from the grants."

He also urged DECC to "listen to industry" when deciding on what level of tariffs to set in the RHI.

Chetan Lad, strategy manager for British Gas New Energy, also spoke at the event and called for the scheme to be "easy to understand and simple to access for the consumer" and for tariff levels to be high enough to achieve mass deployment.

Mr Lad added: "We need to ensure that the rates of return from the RHI are better, or as good as, what we can get in the power sector under the RO."

Supply

Another issue raised in the seminar was a concern for supply in the sector.

Nick Barker from AEA Technology - which was commissioned by DECC along with NERA to carry out research in the heat sector - explained that the research, which was published alongside the Renewable Energy Strategy in July 2009 (see this NewEnergyFocus story), had found that there are "uncertainties with high levels of renewable heat deployment".

He said: "It depends highly on the rate at which UK supply capacity can grow which could significantly limit the level of renewable heat achievable up to 2020.

"We have come up with a plausible but ambitious outcome but in order to meet that and therefore meet the government's heat target we will need a very aggressive growth rate."

Stewart Boyle, marketing development manager at Balcas - a wood product supplier - also commented on the "crisis" facing the heat sector "family".

"We have got projections here that say we can do it and I think over the next few years we are going to be challenged on that a lot. A 30 fold increase is the kind of challenge you are looking at," he said.

"There are quite a few people in the wings waiting for us to trip up and say ‘see I told you so'. Welcome to your family crisis, it is coming fast, don't fight it and we might just about make it through to avert the real crisis," he added.